Late yesterday afternoon news broke of the House Financial Services Committee Democrats' new crypto legislation. First things first I want to acknowledge the monster in the room concerning this and don't worry this legislation is already dead on arrival. Moves like this are sadly to be expected in the coming months as these bills are introduced with the Members knowing it doesn't have the slightest chance to get a vote but instead is done as a messaging thing that they can point at. Who is Behind This Legislation Another HUGE thing to highlight is Rep. Sean Casten and his ties to the crypto industry. Guess whose brother was on his staff and served as a Legislative assistant? None other than SBF's brother Gabe! While Rep. Casten says that Gabe played no role in his crypto views or did anything in that realm Gabe was able to use his relationship with Casten to help his brother out whether anyone wants to admit to it or not. I would bet that the contacts that Gabe had were a huge boost for his brother. Looking at who else has already come out and been in support of this legislation we have the expected actors, Reps. Brad Sherman (D-Calif.), Emanuel Cleaver (D-Mo.), and Bill Foster (D-Ill.). Having worked or currently work on the other side of the aisle of these people it's to be expected. In particular, Rep. Sherman is someone who truly I do not understand how he got his job and more importantly what technology did to him to hurt him. The guy is consistently against cutting-edge innovation and made what I find to be the funniest comment about crypto years ago.
He asked a witness testifying before a Committee why we don't "just flip the switch and turn off crypto".
I wish I had made up that quote but sadly.... nope. What Would This Do While the full text has not been released as far as I can tell, I also cant even find a circulating draft so it is clear they left this on the Dem side exclusively, the bill is rather straightforward. The legislation would place a 2-year "prohibition" on financial services (CEXs) from dealing with crypto that has been funneled through mixer. During the two year "prohibition" the SEC, CFTC, and Justice Department are required to study the use of mixers and what role they play in helping to facilitate illicit finance. Below is Casten's comment.
"The presumption should be that these are money laundering channels," Casten said, unless sufficient audit work shows otherwise. "Let's go through and get that cleaned up and fixed."
Why This is a Stupid Waste of Time Within the released text this bill is only going to affect entities that the US government is already monitoring/controlling. This legislation further fails to address what if some of your BTC had previously been through a mixer? Would Coinbase or whoever else was in possession of it have to divest it and then buy "new" BTC that wasn't touched by a mixer? We also already have the Justice Department working with numerous blockchain analysis companies that are able to track BTC that have passed through mixers. We literally have these answers yet this group of Congressman either A) are not being kept in the loop by their staff or B) just ignoring what we know to push an agenda that is knownly NOT POPULAR with people.
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